Krungsri Asset Management Company Limited (KSAM) has launched two New Foreign Investment Funds (FIFs): KF-HUSINDX and KF-HJPINDX which invest in the US and Japan’s stock markets, citing that the countries’ economies have been recovering, the markets have strong fundamentals, and government policies are supporting growth of economy and stock markets. Investors should consider adding FIFs to their investment portfolios for short-term speculations while the Thai bourse remains volatile.

Krungsri Asset Management Company Limited recently held a seminar on “Japan vs the United States: which market to reap profits in 2017?,” inviting investment gurus: Ms. Chatkaew Groatong, Vice President for Alternative Investment Department, and Mr. Kiattisak Preecha-anusorn, Assistant Vice President for Alternative Investment Department, to brief on comparative economic data and the US and Japan’s stock market outlooks. Pros & cons with risks in investment and impact factors for market growth was also analysed for investment decision-making. The seminar was held at Access Place, Ploenchit Tower on Thursday, 29 March 2017.

Mr. Kiattisak said that the US stock market has grown from robust economic conditions and certain signs of economic recovery that leads to the Federal Reserve’s recent raise of interest rates and growth in business sectors – consumption, manufacturing, services, real estate, including a decline in unemployment rates and increase in wages. According to the International Monetary Fund (IMF), the US gross domestic product (GDP) is forecasted to expand from 1.6% in 2016 to 2.3% this year. Besides, another positive factor for the US economy is US President Donald Trump’s policies, including: a corporate income tax cut from 35% to 15%, which could bring profits to the companies and entice foreign capital to move back to the country; deregulation in business constraints, particularly in the finance & banking and energy sectors which could lead to business expansion, and; infrastructure development with planned spending on projects indicating more job creation. The US economy has signalled positive signs after Trump took the US presidential office.

U.S. GDP

With respect to risks in stock markets, they include: concerns over conformity to Trump’s policy according to recent election voting, and; depreciating the recent US rate rise. KSAM takes the view that Trump’s policies will be partly processed but will suffice to keep the economy growing stronger than currently shown. In this regards, there is a difficulty to achieve trade protection policies due to some protests. Moreover, the US rate rise will not affect the stock market since its adjustment is at a super-low level. However, the stock market tends to rise according to an increase in interest rates adjusted due to good economic conditions.

For Japan, Ms. Chatkaew explained that its economy has recovered at a gradual pace. Japan’s economic expansion came mainly from domestic consumption, the key economic driver which contributes 58% of the nation’s GDP. The country’s inflation has seen improvement from its prolonged deflation throughout the past two decades.

Besides, “Abenomics,” a bold three-arrow strategy of Japan’s Prime Minister Shinzo Abe during 2012-2016, is a combination of monetary easing, fiscal stimulus and structural reforms. On the monetary front, money was injected into the system to spur inflation and stimulate people’s spending. The fiscal stimulus drove up public expenditures, while the structural reform extended from cutting the corporate tax rate, and increasing the workforce in the system and wages. All of these key Abe pushes lowered the unemployment rate, heightened money supply in the economic system, revived Japan’s stagnant growth and boosted corporate profits. Japan’s tourism promotion and its hosting of the Olympics 2020 will be another push for Japan to make a significant recovery.

Talking about Japan’s stock benchmark, the Nikkei 225 index has skyrocketed over 80% as a result of Abenomics policy and tends to surge further on the back of consistent support from both public and private sectors. Last year, the Bank of Japan increased its purchase of ETFs in Japan’s stock market from 3.3 trillion yen per year to 6 trillion yen per year. This year is expected to see share buybacks from Japanese private firms rising from 5 million yen in the previous year to 7.8 trillion yen. Presently, the Government Pension Investment Fund (GPIF), the world’s largest pension fund’s holding of domestic shares has yet to reach its target range of 25% (as of December 2016, the holding was 23.76%.). Therefore, there remains a chance for more capital to pour into the Japanese stock market. Besides, the US benchmark rate’s expected rises prompted a wider gap between the US bond yield and Japanese bond yield, which could pressure the Japanese yen to depreciate against the US dollar. This likely reaction will be positive for earnings growth of listed companies in Japan. This year, most analysts expect Japan’s listed firms to record earnings growth in a range of 9%-12%.

Given the positive factors for both countries’ economic recoveries and stock market improvements, investing in US and Japanese stocks looks attractive. Investors may opt to invest in either KF-HUSINDX (Krungsri US Equity Index Hedged FX Fund) which invests in iShares Core S&P 500 ETF or KF-HJPINDX Fund (Krungsri Japan Equity Index Hedged FX Fund) which invests in Nikkei 225 ETF under management of Nomura Asset Management. Both adopt a passive style of investment, focusing on achieving returns close to the S&P 500 and Nikkei indexes. No less than 90 per cent of these funds are hedged against foreign exchange risks (FX risks). KSAM believes that both US and Japanese markets contain upside of approximately 9%. Investors are advised to watch for the right timing to invest for higher returns.

For those who want to adjust their investment portfolios in 2017, KSAM gurus recommend an investment portfolio that focuses on investing in fixed income 37%, equities 63% – 33% in Thai stocks, 20% in developed markets, and 10% in new emerging markets. This portfolio pattern is suitable for investors with medium risk appetite.

Furthermore, In addition, KSAM has selected seven FIFs with expected returns and growth potential for long-term investment. Investors may invest in any of these FIFs upon each individual’s tolerance level of risks.

–Krungsri Global Smart Income Fund (KF-SINCOME) and Krungsri Global Collective Smart Income Fund (KF-CSINCOM) invest in several types of fixed income across the world through a foreign fund titled PIMCO Income Fund, which is an investment option that shows not too high risk but potentials to gain higher returns than the general fixed income funds focusing on government bonds and debentures.

– Krungsri Japan Hedged Dividend Fund (KF-HJAPAND) has become an option to help invest in the Japanese stock market through a foreign fund titled Eastspring Investments – Japan Dynamic Fund that uses an active management strategy to catch quality stocks with attractive prices.

– Krungsri BRIC Star Fund (KF-BRIC) invests in Schroder ISF BRIC Fund which focuses its investment in the world’s leading exporting countries, including Brazil, Russia, India and China. These countries have positive factors that drive their economies in terms of manufacture and export of crucial goods. For example, Russia has an opportunity to grow from manufacturing and exporting oil and natural gas, while India is expert in IT and medical industries.

– Krungsri Global Technology Equity Fund (KF-GTECH) invests in a foreign fund titled T.Rowe Price Funds SICAV – Global Technology Equity Fund that invests in tech stocks, which is one of the fast-growing industries in the world according to a rise of new innovations that pay an important role in both consumer and global industry sectors. These companies thus have potential to gain a solid increase in revenue.

– Krungsri Global Healthcare Equity Dividend Fund (KF-HEALTHD) invests in a foreign fund titled JPM Global Healthcare Fund which focuses its investment in healthcare firms with sound fundamentals and bright growth outlooks according to the estimation that global health expenditure will increase because more people have become elderly and live longer.

– Krungsri Asset Management Co., Ltd. (“The Management Company”) believes the information contained in this document is accurate at the time of publication, but does not provide any warranty of its accuracy. Similarly, any opinions or estimates included herein constitute a judgment as of the time of publication. All information, opinions and estimates are subject to change without notice.

– Investors should carefully study fund features, performance, and risk before making an investment decision. Past performance is not a guarantee of future results.

For KF-HUSINDX and KF-HJPINDX

KF-HUSINDX allocates at least 80% of NAV in each accounting year in a foreign fund titled iShares Core S&P 500 ETF (master fund) iShares Core S&P 500 ETF (master fund), which focuses to invest in stocks that are included in the S&P 500 Index. The master fund`s objective is to provide investment results that, before expenses, correspond to the price and yield of the S&P 500 Index. KF-HJPINDX allocates at least 80% of NAV in each accounting year in a foreign fund titled Nikkei 225 Exchange Traded Fund (master fund), which invests only in stocks that are included or are due to be included in the Nikkei 225. Thus, both funds may have risks from economic and/or political and/or social changes in the country where the master fund invested in. These risks may affect the stock prices as well.

The fund and/or master fund may invest in or make available a forward contract to enhance efficiency in investment management. This means the fund may contain higher risks than other funds and therefore the fund is suitable for investors who prefer higher return with higher risk tolerance than general investors. Investors should invest only when they understand the risks of the contract by considering their investment experience, investment objectives and financial status.

The funds will enter into a forward contract to hedge against the exchange rate risk at a particular time for the value of at least 90% of the foreign investment value, in which case, it may incur costs for risk hedging transaction and the increased costs may reduce overall return.

The fund and/or master fund may invest in non-investment grade debt securities or unrated debt securities. The investors may be exposed to the issuer’s default risk which results in loss of entire or partial investment and, upon redemption, may not receive full refund of investment amount specified in the prospectus.

The asset management company is under the supervision of Securities and Exchange Commission (SEC). The SEC approves of the establishment of KF-HUSINDX and KF-HJPINDX, however, does not take responsibility for the fund management and does not guarantee the fund’s unit price.

For other recommended funds

Fund policies and risks

– KF-SINCOME and KF-CSINCOM allocates at least 80% of NAV in each accounting year in a foreign fund titled PIMCO GIS Income Fund (Class I-Acc) (master fund). Since the Fund returns depend on the master fund performance, investors may not receive the returns at a certain time. Risk level: 5.

– KF-GOLD & KF-HGOLD allocates a minimum of 80% of its NAV on average in each fiscal year to be invested in a mutual fund investing in foreign countries named SPDR Gold Trust (master fund). Risk level: 8.

Currency hedging policies of the funds

– KF-SINCOME / KF-CSINCOM/ KF-HJAPAND and KF-HGOLD will enter into a forward contract to hedge against the exchange rate risk at a particular time amounting to at least 90% of the foreign investment value, in which case, it may incur costs for risk hedging transactions and the increased costs may reduce overall return.

– KF-BRIC/ KF-LATAM/ KF-GTECH and KF-HEALTHD may enter into a currency swap within discretion of the Management Company which may incur transaction costs. The increased costs will reduce overall return. In the absence of a currency swap, investors may lose or gain from foreign exchange or receive lower return than the amount initially invested.

– KF-GOLD is generally not hedged against currency risk and investors may make a loss or profit from currency exchange or may receive payment in an amount lower than the initial investment amount.

NRSA panel chief wants online media to be included in licensing system.

PRIME MINISTER Prayut Chan-o-cha yesterday attempted to allay fears over the controversial media regulatory bill, denying it was intended to restrict media freedom and calling for mutual trust between the media and the government.

He said it was necessary to have a new law to regulate the mass media, particularly online social media, due to a lot of problems created by “bad people” who spread false information irresponsibly.

“Do not fear restriction of the media. Why do I need to do so? I cannot work without the media. The media help expand my understanding. The media warn me about something bad, and I am ready to look into it,” Prayut said.

He urged the media to accept a regulating committee in the new legislation, but said he did not completely agree with the draft bill proposed by the National Reform Steering Council (NRSA). “I still do not agree with the draft. Before agreeing with it, I have to listen to the people and the media so see what they think,” he said.

Prayut did not elaborate as to whether he was referring to a proposed requirement that all media professionals, including those in the social media, need to have licences.

Any media professional working without a licence risks a jail term of up to three years or a maximum fine of Bt60,000, or both, according to the media reform bill.

The prime minister said media groups had admitted they were unable to regulate their members and therefore a regulating body was required.

He maintained that he was not blaming the media but that the regulating body was required to prevent “bad people” from doing whatever they liked. “Other countries have the same thing and they have problems with social media. We are adopting a principle that is acceptable to the international community,” he said.

NRSA vice president Alongkorn Ponlaboot said yesterday that the assembly had no intention of restricting media freedom or controlling the media by proposing the new law.

“We just want to improve the quality of the media profession. We want the media to adhere to a code of ethics and take social responsibility,” he said.

Alongkorn, formerly a politician from the Democrat Party, also said he did not think the NRSA would agree with any provision that went against international standards.

Meechai Ruchupan, chairman of the Constitution Drafting Commission, said yesterday that the 2017 Constitution does not require media professionals to have licences.

Despite strong opposition, the contentious media regulatory bill has been scheduled for deliberation by the NRSA at its meeting next Monday.

In the latest revision, alternative news outlets broadcast via online channel are also included in the draft law. They are expected to be subject to the same treatment, such as have a licence, like traditional and mainstream media.

ACM Kanit Suwannet, chairman of the NRSA’s media reform committee, told The Nation that the assembly viewed online media as no different from traditional media such as newspapers or television, apart from their broadcasting channels, so they should be included in the new regulatory system too. The draft bill had given a rough definition of such new media as instant creators who earned income from providing online content, he said.

“Anyone who feeds content to the public online and gains profit, for instance, from advertisements would be under this law, too,” Kanit said. “These include those [Facebook] pages with a lot followers that have advertisements running on them.”

The law had to keep pace with the advances in technology, he said.

Alternative news outlets in the online world have gained significant momentum in recent years. They are considered by many people as competitors or even killers of the traditional mass media, as audiences are increasingly rely on the Internet for news rather than listening to the radio, watching television or reading papers.

These outlets include portal websites and online new agencies such as Kapook.com, Sanook.com, Thematter.co, and the Momentum.co. They are expected to be impacted by the media regulatory bill too.

Teepagorn Wuttipitayamongkol, a co-founder of alternative online news agency The Matter, wrote on his Facebook that the bill was an obvious attempt to control the media.

“Imagine having to ask for permission every time [we] make a joke or report news that might oppose the powers that be. [Imagine] a world where a handful of people try to impose their morality on diverse people,” the veteran columnist wrote. “We can see how tragic this media registration is.”

Online media people and bloggers yesterday had mixed reactions to the proposed licensing of media professionals.

Nunchavit Chaiyapaksopon, IT blogger at Yokekungworld.com, said the licensing requirement could make online media and bloggers more responsible. However, the requirements should be set out clearly and the licensing process should be transparent enough for outside checking.

Nuttaputch Wongreanthong, digital marketing blogger at Nuttaputch.com, saw potential in the regulation attempt. By doing so, he suggested, online thought leaders should be encouraged to take part in the bill-drafting process to provide timely and true-to-context insights.

Poramate Minsiri, managing director and CEO at Kapook.com, however was concerned that the government’s role in licensing could curb media freedom. He believed that self-regulation and society could be a more efficient in the modern world.

“When authority sets up such a process, we will see fewer online reporters, given that they will be required to register beforehand,” Poramate said. “The media might be more limited to report on issues, especially on rights infringements.”

Khajorn Chiaranaipanich, an IT blogger at Khajochi.com, said it would be hard to specify who are media workers and who are not in the online arena.

Apisilp Trunganont, president of Thai Webmaster Association and co-founder of Pantip.com, saw ambiguity in the NRSA’s explanation of the bill. “What kind of media will need to be licensed, who exactly will issue the licences, and how they will be used upon a worker or legal person?” he asked. “We need to know answers to these questions,” he said.

IT TV host Pongsuk Hiranprueck said he was willing to be licensed. “But I’m sure that more than 1 million Thais will be ready to break the law,” he said, adding that he did not think Facebook would allow an authentication system to screen out unlicensed media.

Experts seek more action to deal with cronyism.

THE PRAYUT government has made some progress in suppressing corruption but it needs to show that it would not spare any wrongdoers including its cronies, anti-corruption experts said yesterday.

They were speaking at a seminar, “Monitoring the Prayut Government’s Anti-Corruption Policies”, which was organised by Thailand Development and Research Institute (TDRI) and the Anti-Corruption Organisation of Thailand (ACT).

Thippatrai Saelawong, a principal researcher from the TDRI, said the government has been doing its best to tackle corruption by reforming and enacting some new laws. At least five laws to help suppress corruption have been enacted during its term of nearly three years.

The research team looked into the progress of the government’s anti-corruption effort by examining degrees of action, from light action to the most concrete action of law enactment.

The team found that the government had performed quite well, with a score of about 67 per cent, in preventing officials intervening in state business via subjective judgements, one of the two prime sources of corruption. The other is state procurements.

At least two necessary laws have been put in place, particularly the state service facilitation law, under which state permission has become more transparent through concrete procedures, Thippatrai said.

The government has scored around 60 per cent regarding progress in trying to steer clear of corruption in state budget spending. At least two necessary laws, including the state procurements law, have been put in place to regulate and make spending of the state budget more transparent.

However, the promotion of public participation to ensure more transparency of state acts has been less successful as most laws have not yet been enacted, including the state information provision law, said Thippatrai.

“We have seen some progress in the government’s anti-corruption policies by taking a look at its law enactment on what is necessary. Still, we cannot tell yet whether these would lead to the success of corruption suppression as we need to monitor the enforcement of these new laws more as well as the outcome of the action,” said Thippatrai.

He added that there was still concern that an open atmosphere for discussions and participation was still relatively slim and several issues still remain closed to the public, including security issues.

Mana Nimitmongkol, ACT’s secretary-general, said the government has not yet been able to reach enough people to discuss solutions to the problem of corruption.

Some groups have joined the government’s efforts but they are being outpaced by the scale of the problem. This government had enacted more anti-corruption laws than past governments but cronyism has overridden its efforts.

Efforts in structural changes or long-term anti-corruption policies are desperately needed, he said.

AS TOUR OPERATORS in Myanmar are eyeing to partner with foreign firms to serve their clients better, Flymya.com, the nation’s leading hotels and tours services website, has acquired Switch.cm, a London-based start-up specialising in building reservations platforms for the hotel and airline industry, for US$ 600,000.

Mike Than Tun Win, chief executive officer of Flymya.com, said in an interview that the acquisition of Switch.cm’s hotel software would allow his firm to leverage its local expertise to deploy world class technology to small and medium–sized hotels as it continues its growth as the leading over-the-air (OTA) in Myanmar and the region.

“We look forward to utilising the software to provide an added value to our hotel partners. It offers the same function as expensive hotel management software selling in the market with many local hotels cannot afford. It will be provided free to help local hotels get management software to help them sell online easily and generate more income,” he said.

Mike said the software would help create a direct Application Programming Interface (API) architecture for Flymya’s hotel partners to deliver real-time price and availability to consumers.

Widely used

The software is widely used in 41 countries including the United States, South America, the United Kingdom, Australia and Asian countries. In Myanmar, it was just launched. For the initial period, the firm will be charging some service income for processing their customer payments online.

“For hotels, we wanted to focus on regional hotel owners who might be intimidated by legacy software, especially small and medium-sized hotels. We will carry on to expand customers, based on Indonesia and Myanmar and Asean as our main focus,” he said.

“People generally take for granted the incredibly sophisticated architecture that goes behind making a hotel reservation,” he added.

The use of advanced technology is still a new concept in small and medium-sized hotels in Myanmar. Yet, Flymya.com has planned to help them address such challenges by taking over the user-friendly and simple software which can help them a great deal with hotel reservations management.

“Major challenges that local small and medium-sized hotels are facing depends on the fact that there is no local technical support and no up-to- date technical knowledge training since most of the hotel operation software are based in foreign countries,” he said.

Mike assures of offering 24/7 customer support 365 days, thanks to the firm’s onground presence. He promises to support all the technical solutions and trainings to its hotel partners anywhere, anytime related to the software.

Mike said he had a chance encounter with Jeff Pan, the founder of Switch.cm, and his team in the closing minutes of the Tech in Asia conference in Singapore last year as they were on their way to the airport. Pan was an exhibitor as a start-up in the Bootstrap Alley section of the event.

“We were extremely impressed by Jeff’s background as both a hotelier and a software engineer with deep knowledge of hotel API architecture. We look forward to utilising his team’s software to provide an added value to our hotel partners,” he said.